United States District Court, E.D. Pennsylvania
case involves a dispute over alleged damages to a car the
plaintiff rented from Budget Rent A Car System, Inc.
Defendant Viking Collection Service, Inc., attempted to
collect the debt on behalf of Budget after the plaintiff
declined to pay for the damages. Three counts remain in
plaintiff's second amended complaint. First, plaintiff
alleges Viking violated the Fair Debt Collection Practices
Act (“FDCPA”), 15 U.S.C. §1962e, by sending
communications to the plaintiff that misrepresented the
amount, character, and legal status of the alleged debt.
Second, plaintiff alleges breach of contract and breach of
the covenant of good faith and fair dealing against Budget.
Lastly, plaintiff alleges that Viking and Budget both
violated the Pennsylvania Fair Credit Extension Uniformity
Act (“PFCEUA”), 73 Pa.C.A. §2270.
parties recently moved for summary judgment. Plaintiff moved
for partial summary judgment against Viking as to the first
cause of action alleging a violation of the FDCPA. Viking
opposed plaintiff's motion and cross-moved for summary
judgment as to both claims. Budget moved for summary judgment
as to plaintiff's PFCEUA and breach of contract claims.
Plaintiff opposed Budget's motion.
reasons discussed below, plaintiff's motion for summary
judgment against Viking is denied, and Viking's
cross-motion for summary judgment is granted in full.
Budget's motion for summary judgment is granted in part
and denied in part. First, Budget's motion for summary
judgment as to count three alleging breach of the duty of
good faith and fair dealing relating to timeliness of the
notice is granted. I find there is a question of fact whether
Budget breached the duty of good faith and fair dealing in
its use of the sale date, rather than the replacement date,
in the loss of use formula. With respect to count four
seeking declaratory judgment, I find that the use of fair
market value rather than book value is reasonable as a matter
of law and does not constitute a penalty. However, because
there is a question of fact whether the loss of use formula
is reasonable, Budget's motion to dismiss count four is
denied. Finally, Budget's motion for summary judgment on
plaintiff's claim alleging a violation of the PFCEUA is
2008, Plaintiff Anne Humphreys-a resident of
Pennsylvania-rented a car from Budget in Florida. As part of
this transaction, she signed the standard form rental
agreement and declined loss damage waiver (LDW) coverage. The
rental agreement provided that if the renter declined to
purchase LDW coverage and the car was lost or damaged, the
renter is liable for either the estimated repair cost or, if
Budget in its sole discretion determines to sell the car,
“the difference between the car's fair market
retail value before it was damaged and the sale
proceeds.” It also required the renter to pay for
Budget's loss-of-use of the car, without regard to fleet
utilization, plus an administrative fee, and towing and
events leading up to this controversy began in July of 2008
when the plaintiff's rental car stalled in a rain storm
and was towed back to Budget. Budget then provided the
plaintiff with a replacement car. On January 27, 2009, Budget
sent the plaintiff a letter stating that she owed $11, 225.55
for damage to the first car. Because the plaintiff declined
LDW coverage, Budget claimed she was responsible for any
damage to the car while it was in her possession, regardless
alleges that because Budget failed to timely notify her of
the damage, the plaintiff's credit card and auto
insurance companies declined to cover the claim as untimely.
On March 2, 2009, the plaintiff sent a letter to Budget
stating that her insurer and credit card company were not
willing to pay for the damages. She declined to pay the
alleged debt stating that “[s]ince the delay of
notification by Budget is what precluded timely submission of
the claim, it would seem that the fault lies with
April 10, 2009, Viking sent the plaintiff a
letter at her home in Philadelphia demanding full
payment of the $11, 225.55 allegedly owed to
Budget. To arrive at that damages sum, Budget
subtracted the actual disposal proceeds or salvage value of
the plaintiff's rental car ($6, 775.00) from what Budget
had listed as its actual cash value prior to the accident
($17, 434.12). The $6, 775.00 salvage value was the
amount that Budget received from selling the damaged car at
auction ($7, 000.00) minus the auctioneer's towing and
administrative fees ($225.00).
also charged the plaintiff $150.00 for
“appraisal/evaluation/administrative fees” and
$416.43 for loss of revenue/use. The $416.43 loss of
revenue/use fee was calculated by multiplying the daily rate
for the rental vehicle ($19.83) by Budget's fleet
utilization estimate (70%) and then by the number of days
Budget claimed had passed before the vehicle was sold
statement outlining the sale of the damaged rental vehicle at
auction indicates that the car had “engine
damage.” The statement lists the date of loss as
July 30, 2008. Id. The car was then sold on August
13, 2008. The statement indicates that the
“elapsed total days” related to the loss was
to Budget's records, the car rented by the plaintiff was
purchased by Budget in January 2008 for $18,
314.00. Budget listed its book value at the time
of the accident as $16, 354.45, the purchase price minus the
accumulated depreciation of $1, 959.55 (accounting for the
decline in value over six months of use).
the plaintiff brought this suit against Budget and Viking
seeking damages, restitution, declaratory relief, an
injunction, expenses, and attorney's fees. The complaint
alleges a violation of the FDCPA by Viking, a breach of
contract/breach of the covenant of good faith and fair
dealing by Budget, and a violation of the PFCEUA by both
Budget and Viking. The complaint also asserts a count of
unconscionabilityagainst Budget (Count IV) and a count for
declaratory judgment and injunctive relief (Count V) to
prevent the defendants from collecting the charges that the
plaintiff asserts she does not owe.
plaintiff filed an initial complaint on March 25, 2010. (Doc.
No. 1.) On May 10, 2010, the defendants filed a Motion for a
More Definite Statement under Rule 12(e). (Doc. No. 9.)
Subsequently, discovery in this case was stayed and the
defendant's motion was denied without prejudice pending
the resolution of a summary judgment motion in Benson v.
Budget Rent A Car System, Inc., No. 08-4512, which
involved similar questions of law and fact. The
Benson motion was decided on September 29,
April 13, 2012, I issued an order directing the parties to
brief the application of the Benson
decision to the Humphreys case as well
as a choice of law issue. On April 30, 2012, the
plaintiff filed a motion to amend the complaint along with
her response to the April order. On March 4, 2013, I
granted the plaintiff's motion to amend the complaint. I
found that although both this case and Benson asked
the identical question of whether Budget's damages clause
was reasonable, Benson would not preclude any
arguments that the plaintiff may present. Humphreys
v. Budget Rent A Car System Inc., No. 10-1302, 2013 WL
797439, at *5 (E.D. Pa. March 4, 2013) (Stengel, J.). In
response to the plaintiff's amended complaint, the
defendants filed a motion to dismiss and to strike certain
allegations pursuant to Federal Rules of Civil Procedure
12(b) and 12(f).
April 22, 2014, I granted the defendants' motion to
dismiss count four of the amended complaint alleging
unconscionability against Budget. Humphreys, 2014 WL
1608391, at *7. I also dismissed plaintiff's claim
against Viking alleging a violation of FDCPA
§1692(f)(1). Id. at *9. Finally, I dismissed
without prejudice plaintiff's claim against Viking
alleging a violation of FDCPA §1692(e). Id. at
*10. The remaining claims survived.
April 13, 2017, plaintiff moved for summary judgment against
Viking, arguing that Viking violated FDCPA §1692(e) as a
matter of law by sending plaintiff communications that
misrepresented the amount, character, and legal status of her
alleged debt. (Doc. No. 149.) Viking opposed plaintiff's
motion and cross-moved for summary judgment. (Doc. No. 159.)
On May 25, 2017, Plaintiff opposed Viking's cross-motion.
(Doc. No. 168.) On June 16, 2017, Budget moved for summary
judgment. (Doc. No. 164, 166.) Plaintiff opposed Budget's
motion on July 14, 2017. (Doc. No. 169.)
shall grant summary judgment if the movant shows that there
is no genuine dispute as to any material fact and the movant
is entitled to judgment as a matter of law. Fed.R.Civ.P.
56(a). A dispute is “genuine” if the evidence is
such that a reasonable jury could return a verdict for the
non-moving party. Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 248 (1986). A factual dispute is
“material” if it might affect the outcome of the
case under governing law. Id.
seeking summary judgment always bears the initial
responsibility for informing the court of the basis for its
motion and identifying those portions of the record that it
believes demonstrate the absence of a genuine issue of
material fact. Celotex Corp. v. Catrett, 477 U.S.
317, 322 (1986). Where the non-moving party bears the burden
of proof on a particular issue at trial, the movant's
initial Celotex burden can be met simply by
“pointing out to the district court that there is an
absence of evidence to support the non-moving party's
case.” Id. at 325. A party asserting that a
fact cannot be or is genuinely disputed must support the
assertion by: citing to particular parts of materials in the
record, including depositions, documents, electronically
stored information, affidavits or declarations, stipulations,
admissions, interrogatory answers or other materials.
Fed.R.Civ.P. 56(c)(1)(A). Summary judgment is appropriate if
the non-moving party fails to rebut by making a factual
showing “sufficient to establish the existence of an
element essential to that party's case, and on which that
party will bear the burden of proof at trial.”
Celotex Corp., 477 U.S. at 322.
Rule 56, the court must view the evidence presented on the
motion in the light most favorable to the opposing party.
Anderson v. Liberty Lobby, Inc., 477 U.S. at 255.
The court must decide not whether the evidence unmistakably
favors one side or the other but whether a fair-minded jury
could return a verdict for the plaintiff on the evidence
presented. Id. at 252. If the non-moving party has
exceeded the mere scintilla of evidence threshold and has
offered a genuine issue of material fact, then the court
cannot credit the movant's version of events against the
opponent, even if the quantity of the movant's evidence
far outweighs that of its opponent. Big Apple BMW, Inc.
v. BMW of North America, Inc., 974 F.2d 1358, 1363 (3d
Plaintiff's Motion for Summary Judgment Against
argues she is entitled to summary judgment on her claim
against Viking alleging a violation of FDCPA
§1692(e)(2)(A). (Doc. No. 149 at 5-11.) To prevail on a
claim under the FDCPA, a plaintiff must establish: (1) that
he or she is a “consumer” under the FDCPA; (2)
the defendant collecting the debt is a “debt
collector”; (3) the challenged practice involves an
attempt to collect a “debt” as the Act defines
it; and (4) the defendant has violated a provision of the
FDCPA in attempting to collect the debt. Jensen v.
Pressler & Pressler, 791 F.3d 413, 417 (3d Cir.
undisputed that plaintiff is a “consumer” and
Viking is a debt collector as defined by the FDCPA. (Doc. No.
149 at 6; Doc. No. 159 at 50.) It is also undisputed that the
challenged activity involved an attempt to collect a
“debt” under the Act. (Id.) The issue is
whether Viking violated the FDCPA in its attempt to collect
the debt. Plaintiff submits that Viking's communications
were “confusing and confounding” in violation of
Section 1692(e). (Doc. No. 149 at 7-10.) For the reasons
discussed below, I find as a matter of law that Viking did
not violate the FDCPA in its attempt to collect the debt owed
to Budget. Plaintiff's motion for summary judgment is
denied and Viking's cross-motion for summary judgment is
granted in full.
Viking's April 10 communication complied with the
FDCPA and cannot be construed as confusing or misleading to
the least sophisticated consumer.
FDCPA is a remedial statute intended “to eliminate
abusive debt practices by debt collectors.”
Jensen, 791 F.3d at 418-19. Under the statute, a
debt collector must:
(a) Within five days after the initial communication with a
consumer in connection with the collection of any debt . . .
send the consumer a written notice containing -
(1) the amount of the debt;
(2) the name of the creditor to whom the debt is owed;
(3) a statement that unless the consumer, within thirty days
after receipt of the notice, disputes the validity of the
debt, or any portion thereof, the debt will be assumed to be
valid by the debt collector;
(4) a statement that if the consumer notifies the debt
collector in writing within the thirty-day period that the
debt, or any portion thereof, is disputed, the debt collector
will obtain verification of the debt or a copy of a judgment
against the consumer and a copy of such verification or
judgment will be mailed to the consumer by the debt
(5) a statement that, upon the consumer's written request
within the thirty-day period, the debt collector will provide
the consumer with the name and address of the original
creditor, if different from the current creditor.
15 U.S.C. §1692(g). The statute prohibits “[t]he
false representation of the character, amount or legal status
of any debt.” Id. at §1692(e). In
applying this statute, courts employ an objective standard
that asks whether the least sophisticated debtor would be
confused or misled by the communication. Jensen, 791
F.3d at 418-19. The confusing or misleading statement must
also be material. Id. at 421.
April 10, 2009, Viking sent a letter to plaintiff that she
claims violated the FDCPA. I disagree. I find that
Viking's letter complies with the FDCPA. The letter
included the amount of the debt ($11, 225.55) and the name of
the creditor (Avis Budget Car Rental). (Second Am. Compl.,
Ex. 4.) The letter also included the mandatory language
regarding procedures to dispute the debt. (Id.)
Viking's communication complied with §1692(g) of the
FDCPA and was neither confusing nor misleading to the least
argues that Viking's communication is confusing because
Viking failed to itemize the debt. (Doc. No. 149 at 9.) At
the outset, there is no general duty to itemize under the
FDCPA, and such a requirement cannot be read into an
otherwise unambiguous and precise statute. Had Congress
intended to require itemization, it would have included such
a requirement in §1692(g). Viking's inclusion of the
amount of the debt was sufficient to comply with the FDCPA.
more, the circumstances of this case do not necessitate
itemization. Plaintiff cites Dougherty v. Wells Fargo
Home Loan, Inc., 425 F.Supp.2d 599, 607-08 (E.D. Pa.
2008) and Fields v. Wilber Law Firm, 383 F.3d 562,
565 (7th Cir. 2005), arguing that a “debt collector can
avoid violation of §1692(e) by itemizing the various
charges that comprise the total amount of the debt.”
(Doc. No. 149 at 9.) Both Dougherty and
Fields are distinguishable from this case.
Dougherty, the debt collector added $3, 768.50 in
attorney's fees and costs to the total amount owed and
labeled it “recoverable corporate advances.”
Dougherty, 425 F.Supp.2d at 602. The court held that
this labeling was deceptive. Id. at 607-08. In
Fields, the consumer owed $122.06, and the debt
collector stated that the balance was $388.54.
Fields, 383 F.3d at 563. This unexplained balance
included attorneys' fees, which, the court concluded,
“hid the true character of the debt.”
Id. at 566. Both courts reasoned that itemization
could have avoided the defendants' violation of
§1692(e). Dougherty, 425 F.Supp.2d at 608;
Fields, 383 F.3d at 566. But neither
Dougherty nor Fields created a bright-line
rule requiring itemization under §1692. These cases only
suggest that itemization was one way to clarify an otherwise
Viking sought only the amount due to Budget pursuant to the
rental agreement, with no additional charges. (See
Second Am. Compl., Ex. 4.) Viking did not hide “the
true character of the debt” or employ deceptive
labeling that would warrant itemization to avoid a violation
of the FDCPA. Consequently, plaintiff's reliance on
Dougherty and Fields is misplaced.
Viking's communication complied with §1692(g) and is
neither confusing or misleading under §1692(e).
The April 27, 2009 Communication.
sent a second set of documents to plaintiff's counsel on
April 27, 2009. Plaintiff argues that this communication
“deepened the confusion” because it
“contained the highly confusing Vehicle Loss Disclosure
Form.” (Doc. No. 149 at 8.) The issue is twofold: (a)
whether this communication was “in ...